Thursday, Dec. 29, 2005 | 7:49 a.m.
HIGHLIGHTS
CARSON CITY -- A legislative committee approved regulations Wednesday to curb abuses by the expanding payday loan and check cashing industry, the target of a multitude of consumer complaints.
But lawmakers expressed concern about whether the state Division of Financial Institutions would enforce the new law and regulations to stop customers from being overcharged or misled.
Assembly Majority Leader Barbara Buckley, D-Las Vegas, told Carol Tidd, Financial Institutions commissioner, "This law is only good if you enforce it."
In the past, Buckley said, the division did not catch violators under the old law. As an example, she said a person might have borrowed $200 and then was hit with $2,000 in interest and penalties. That was against the old law but was permitted to happen, she said.
Sen. Randolph Townsend, R-Reno, said, "If we give you this authority, will you be able to follow up and enforce it? We don't want to overpromise the public."
Tidd told the Committee on the Review of Regulations that she can hire five new examiners and four of them will be placed in Las Vegas, where 75 percent of the businesses are located.
Townsend said the new law and regulation would "have a substantial impact in Southern Nevada." He said he "didn't know if there was a bigger race for more check cashing businesses or pharmacies" in Southern Nevada. "They seem to be on every corner."
Local governments in Clark County have already started to impose limits on the number of new payday loan businesses.
The new law, approved by the 2005 Legislature, requires a disclosure of the fees made on every loan. There will be a limit on interest charged on a loan that is in default to the prime rate plus 10 percent. Buckley said there won't be any more triple damages charged by the industry, and there will be only one $25 penalty for giving a payday loan company a bad check.
The new regulations govern not only check-cashing services but also deferred deposit loans, short-term loans and title loan services. The rules are aimed at putting in place how the law will work.
The law prohibits unlicensed out-of-state businesses from operating in Nevada and allows the commissioner to impose a fine of $10,000 on any company that conducts business in Nevada without a license.
"The $10,000 will make people wake up," Tidd said.
The commissioner has the power to revoke or suspend a license, impose a fine of $500 for each violation and to recover costs of the disciplinary hearing.
The legislative committee also approved a regulation of the state Pharmacy Board to provide pharmacists with a lunch break. Larry Pinson, executive director of the Pharmacy Board, said pharmacists work 11 to 12 hours and are on their feet all of the time.
"It is not safe to work that long without a break and without meals," he said.
Cy Ryan can be reached at (775) 687-5032 or at [email protected].
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